The Jennings City Council took the first steps Tuesday to create a new economic development district and levy a one-cents sales tax within the district’s boundaries to help subsidize a sewer lift relocation project to accommodate construction of a new business.

The district encompasses 1.5 acres at the corner of La. 26 and West Interstate Drive between Walgreens and Shoney’s restaurant. The site was the location of a former convenience store, but has sat vacant for several years.

The site will be the future home of Hebert’s Boudin and Cracklins, which plans to open a retail location in Jennings.

Mayor Henry Guinn said state law allows parishes and municipalities to create economic development districts to levy sales and use taxes and hotel occupancy taxes, where applicable, up to two percent to help offset the cost of infrastructure projects.

“This is the first economic development district ever created in the history of Jennings or Jeff Davis Parish,” Guinn said. “It is something we have studied for the past two years and we think that if used correctly, it will help the city grow and we can continue to install water lines and sewer lines to open up land for development that we have never seen developed and not directly impact our finances.”

If approved by the city council at a later date, the city will collect an additional one-cents sales tax from sales at Hebert’s Boudin and Cracklins to recoup the cost of relocating the sewer lift station. The lift station, which is located in the center of the property, will be relocated behind the Hampton Inn to allow for construction of Hebert’s Boudin and Cracklins.

City officials have visited several municipalities throughout the state, including Lake Charles, Scott and Ruston, to see how the districts work, Guinn said. Similar proposals are being considered in Crowley and Acadia Parish.

“Essentially any land parcel without a registered vote, the city council can deem an economic development district,” Guinn said. “What that allows you to do is add up to a two cents sales tax on top of that parcel to fund utility repairs, road construction or major infrastructure projects.”

“The beauty about these districts, they are very flexible and site specific,” he continued. “There’s not a broad map that we are going to draw that encompasses the city. These districts will be geared to specific areas that cater to interstate traffic.”

Creating the district will allow the city to move the lift station and place an additional sales tax on top of current retail sales from the business to recoup those expenses, Guinn said. The cost to move the sewer lift station to accommodate construction of Hebert’s Boudin and Cracklins is $360,000, ito include engineer and construction costs.

Based on the gross revenue of the retailer, it is estimated to take six years to reimburse the city.

“The beauty of this district is that his business model is catering to I-10 traffic and the people that come and go will pay an additional one-penny sales tax,” he said. “The resolution says up to two percent can be collected, but based on the finances of Hebert’s Boudin and Cracklins, we feel like one penny will cover the expenses of moving that lift station.”

The sales tax will not affect any other businesses and will have a minimum impact on local residents who purchase items from Hebert’s Boudin and Cracklins, Guinn said.

“It’s geared to that I-10 corridor traffic,” he said.  “We know there are going to be locals that go, but I don’t think they are going to notice an additional one-cent sales tax when they buy a plate lunch.”

The city council can create additional economic development districts in the future for specific areas of the city. The council will also have the authority to remove districts, if needed.

“If there is another site in the city that we feel needs additional utilities, water lines, sewer lines, etc. we could place an economic development district on the parcel of the land,” Guinn said. “Any transaction that happens on that parcel of land is subject to up to an additional two percent sales tax.”

Guinn said the goal of the program is to help the city grow economically without having to drain city finances to help attract new businesses and create jobs.

Hebert’s Boudin and Cracklins is expected to begin construction as soon as work begins on relocating the sewer lift station.

The council has accepted a low bid of $327,000 from Co-D Construction of Parks to relocate the lift station. The relocation project should take about six to eight months to complete.

Construction of Hebert’s Boudin and Cracklins is expected to take 12-15 months to complete.